PETALING JAYA: The Malaysian economy is expected to have an upbeat outlook this year after the Purchasing Managers' Index (PMI) hit 50.0 points in December, the highest in 15 months, says Lim Guan Eng.
The Finance Minister further said that projects pushed by the government to create more jobs and mega infrastructure projects valued at RM120bil seem to have done the trick as domestic economy is set to grow faster in the next coming months.
"Malaysia's economy is expected to do better in 2020 as the manufacturing PMI for December 2019 rises to a 15-month high.
"Furthermore, the government is boosting employment opportunities and the income of youth, fresh graduates and women through the RM6.5bil Malaysia@Work programme, while implementing major infrastructure projects valued at RM120bil," said Lim in a statement on Saturday (Jan 11).
He said that the PMI for Malaysia rose by 0.5 to 50.0 points in December 2019 and it came after the November 2019 PMI improved by 0.2 to 49.5 points from 49.3 points in October 2019.
"The PMI manufacturing improvement suggests the domestic economy would grow faster in the coming months but it is not the only indicator pointing towards a more sustained future expansion.
Lim said that the Department of Statistics Malaysia (DOSM) showed that the latest leading economic indicators expanded 1.4% to 120.3 points in October 2019 versus 118.6 points in the previous month.
"This is a significant improvement from the -0.4% and 0.3% change in August and September respectively," said Lim.
He also pointed out that the trends exhibited by the RAM Business Confidence Index published this week concur with the outlook implied by the PMI and DOSM data.
"The local rating agency RAM suggests that sentiment among Malaysia businesses is improving, with confidence among corporates rising 3.2 points to 56.4 in 1Q20-2Q20 relative to the 4Q19-1Q20 period.
At the same time, confidence among small and medium enterprises (SMEs) rose 1 point to 54.2, which is the highest level since the index began in 2017, he added.
"These findings are in line with the government’s optimistic view regarding 2020 growth prospects, which expects the Malaysian gross domestic product (GDP) to grow robustly at 4.7% in 2019, before accelerating to 4.8% this year.
"For the first three quarters of 2019, the Malaysian GDP has expanded by 4.6% year-on-year," he added.
He said the Malaysian economy in 2020 is expected to be supported among others by major infrastructure works valued at RM120bil, namely the Pan-Borneo Highway, LRT3, MRT2 and ECRL.
Other government initiatives include the building of Bandar Malaysia with a gross development value of RM140bil, the RM450mil digital stimulus of e-wallets providing RM30 free shopping money, as well as the five-year Malaysia@Work job programme that will provide 350,000 job opportunities for the unemployed by giving monthly wage incentive of RM500 to workers and RM300 monthly to employers for hiring local workers.
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